Legislature(2001 - 2002)
02/12/2002 03:40 PM Senate STA
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
SENATE STATE AFFAIRS COMMITTEE
February 12, 2002
3:40 p.m.
MEMBERS PRESENT
Senator Gene Therriault, Chair
Senator Randy Phillips, Vice Chair
Senator Ben Stevens
Senator Bettye Davis
MEMBERS ABSENT
Senator Rick Halford
COMMITTEE CALENDAR
SENATE BILL NO. 267
"An Act establishing the Alaska veterans' memorial endowment fund
and providing for credits against certain taxes for contributions
to that fund; relating to other tax credits for certain
contributions; and providing for an effective date."
MOVED SB 267 OUT OF COMMITTEE
SENATE BILL NO. 268
"An Act relating to the issuance of state-guaranteed revenue
bonds by the Alaska Housing Finance Corporation to finance
mortgages for qualifying veterans; and providing for an effective
date."
MOVED SB 268 OUT OF COMMITTEE
SENATE BILL NO. 236
"An Act making supplemental and other appropriations for homeland
security; and providing for an effective date."
SCHEDULED BUT NOT HEARD
SENATE BILL NO. 238
"An Act relating to state plans and programs for the safety
and security of facilities and systems in the state; and
providing for an effective date."
MOVED CSSB 238(STA) OUT OF COMMITTEE
SENATE BILL NO. 240
"An Act relating to the crimes of damaging an oil or gas
pipeline or supporting facility, criminal mischief, and
terroristic threatening; making conforming amendments; and
providing for an effective date."
MOVED CSSB 240(STA) OUT OF COMMITTEE
SENATE JOINT RESOLUTION NO. 31
Urging the United States Congress to permit the use of tax
exempt bonds to fund loans for veterans who served after 1976.
MOVED CSSJR 31(STA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 267 - No previous action to record.
SB 268 - No previous action to record.
SB 236 - See State Affairs minutes dated 1/31/02.
SB 238 - See State Affairs minutes dated 1/24/02, 1/31/02.
SB 240 - See State Affairs minutes dated 1/24/02, 1/31/02.
SJR 31 - See State Affairs minutes dated 2/7/02
WITNESS REGISTER
Senator Jerry Ward
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: SJR 31 sponsor
John Bitney
Alaska Housing Finance Corporation (AHFC)
4300 Boniface Parkway
Anchorage, AK 99510
POSITION STATEMENT: Testified on SB 268
Laddie Shaw
Department of Military &
Veterans Affairs
PO Box 5800
Ft Richardson, AK 99505-0800
POSITION STATEMENT: Testified on SB 267
Pat Carothers
Alaska Veterans Advisory Council
Juneau, AK 99801
POSITION STATEMENT: Testified on SB 267
Neil Slotnick
Deputy Commissioner
Department of Revenue
PO Box 110400
Juneau, AK 99811-0400
Frank Richards
State Maintenance Engineer
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Testified on SB 238
John Steiner
Eagle River, AK 99517
POSITION STATEMENT: Testified via teleconference on SB 238
Joe Balash
Staff to Senate State Affairs Committee
Alaska State Capitol Room 121
Juneau, AK 99801-1182
POSITION STATEMENT: Explained proposed CS for SB 240
Annie Carpeneti
Department of Law
PO Box 110300
Juneau, AK 99811-0300
POSITION STATEMENT: Testified on SB 240
ACTION NARRATIVE
TAPE 02-7, SIDE A
CHAIRMAN GENE THERRIAULT called the Senate State Affairs
Committee meeting to order at 3:40 p.m. Present were Senators
Davis, Stevens, Phillips and Chairman Therriault.
The first order of business was SJR 31.
SJR 31-TAX EXEMPT BONDS TO FUND VETERANS LOANS
CHAIRMAN THERRIAULT announced there was a proposed CS in
committee member's packets.
SENATOR JERRY WARD, sponsor, explained this resolution urges the
United States Congress to support H.R. 959 and S. 615 to amend
the Internal Revenue code to allow veteran home loans to be
issued to veterans that have served after 1977.
CHAIRMAN THERRIAULT said his staff has spoken with Senator Ward's
staff to discuss the proposed CS. First, a reference was
corrected and then one "WHEREAS" was deleted. His view is that
they are asking Congress for favorable action on the H.R. 959 and
S. 615 so any hint of antagonism should be avoided.
SENATOR WARD endorsed the CS then said:
However, in the eyes of some veterans, I believe
that some past Congresses have been very
antagonistic and not supportive of veterans. For
veterans to place their life on the line and for
Congress not to do something as simple as home
ownership, yes, I might be a little bit disturbed
in their action in the past and many veterans are
too. However, I don't mind being polite if it
gets the job accomplished.
SENATOR THERRIAULT said that is what he is trying to keep in
mind.
He asked whether members had questions for John Bitney of AHFC
regarding the housing loan method and there were none.
He extended his apologies to Senator Ward for not giving him a
copy of the CS earlier but the draft amendment was finished just
before the meeting convened. The CS simply changes the tone of
the "WHEREAS" on page 2 lines 15 through 18. The amendment reads
as follows:
BE IT RESOLVED that the Alaska State Legislature
th
respectfully urges the 107 United States Congress to
support H.R. 959 and S. 615 to remove the portion of
the Internal Revenue Code which restricts access to
state veterans' home loan programs for veterans who
served after 1976 so they and their families may enjoy
the same benefits as their earlier counterparts.
SENATOR PHILLIPS made a motion to adopt the committee substitute
22-LS097\C Cook 2/12/02 as the working document. There being no
objection, the motion was adopted.
SENATOR PHILLIPS made a motion to adopt the proposed amendment
#1. There being no objection, amendment #1 was adopted.
There was no additional testimony.
CHAIRMAN THERRIAULT called attention to the zero fiscal note.
There were no further questions or amendments.
He asked for the will of the committee.
SENATOR PHILLIPS made a motion to move CSSJR 31(STA) and zero
fiscal note from committee with individual recommendations.
There being no objection, CSSJR 31(STA) and fiscal note moved
from committee with individual recommendations.
SB 268-GUARANTEED REVENUE BONDS FOR VETERANS
JOHN BITNEY from the Alaska Housing Finance Corporation explained
that Alaska is one of five states that qualifies to issue tax-
exempt bonds under the IRS code. The bonds are issued to provide
home mortgages for qualified veterans. This program defines a
qualified veteran as someone who served in the United States
Armed Services prior to January 1, 1977. Because there is a
diminishing pool of qualified veterans, they anticipate that the
next requested $500 million bond authorization will be the last
unless Congress takes action as requested by SJR 31. The nature
of the tax exemption in the IRS code requires that the state
provide a guarantee behind the bonds. SB 268 takes that question
to the general election ballot for the voters to approve as a
general obligation of the state. As a matter of record, he stated
this does not cost the state money from the treasury. The
structure is such that the mortgages that the bond proceeds
purchase are pledged against the debt and are used to repay that
debt. This guarantee helps the state to qualify for the tax
exemption but it does not cost the state. In the view of the
rating agencies, this structure does not limit the state's
general obligation bond capacity.
He said it is a good program and he asked the committee to take
favorable action.
CHAIRMAN THERRIAULT asked if he would be back to ask for
increased authorization if Congress acts favorably on H.R. 959
and S. 615 because this bill wouldn't cover the expected demand.
MR. BITNEY replied he would probably be back in 2004 if the bills
pass, but if Congress did not take action, this authorization
would last until about 2010 when the program would most probably
end.
CHAIRMAN THERRIAULT noted the fiscal notes from the Division of
Elections and AHFC.
There was no further testimony and no amendments were offered. He
asked for the will of the committee.
SENATOR PHILLIPS asked to be exempt from voting to move the bill
because he works for the state's largest mortgage company and it
might be perceived that he is benefiting.
CHAIRMAN THERRIAULT thanked him for his disclosure but objected
to his exemption.
SENATOR PHILLIPS made a motion to move SB 268 and attached fiscal
notes from committee with individual recommendations.
There being no objection, SB 268 moved from committee.
SB 267-ALASKA VETERANS' MEM.ENDOWMENT FUND
LADDY SHAW, state director for the Department of Military and
Veterans Affairs, described the bill as a grant program for
maintenance, repair, replacement, enhancement of and addition to
any veteran's memorials or monuments to veterans and the military
in the state.
The bill proposes to finance the fund through appropriations as
well as contributions that will be eligible for certain state
corporate tax credits.
Presently they have $125,000.00 in the bank and are working to
collect another $20,000.00 that is already pledged. They have
offered that $20,000.00 to the Vietnam Veteran's Moving Wall for
coming to Alaska and as a part of a nationwide non-profit program
to provide information about Vietnam veterans.
He said he represents 68,000 veterans and about 30,000 military
members in the state. They are asking the committee to pass SB
267 thus giving these people the honor and recognition they
deserve.
SENATOR PHILLIPS commented it meant a lot to him personally to
see the Moving Vietnam Wall at the Parks Strip in August.
MR. SHAW agreed that having the wall in the state was very
meaningful. He said that although they have had a tremendous
amount of volunteer help, a number of memorials are in disrepair
and there is no money for their repair or for new memorials such
as one to honor the Alaska Territorial Guard. Some private
individuals feel strongly enough that they are going out on their
own to ask for donations.
When they came up with the present idea as an initiative they
were overwhelmed with the support they received. Any support the
committee is able to give would be appreciated.
SENATOR PHILLIPS asked whether the monument for the Lend-Lease
Act would qualify.
MR. SHAW said construction or repair of any monument that deals
with any area of military and veterans' affairs would be covered.
SENATOR PHILLIPS commented he hopes it would fit because there
were a lot of men and women involved in that effort.
CHAIRMAN THERRIAULT said this just adds another option to the
existing tax exemption but he wasn't clear which tax types this
credit applies against.
MR. SHAW asked that the representative from the Department of
Revenue answer those questions.
MR. NEIL SLOTNICK, deputy commissioner of Department of Revenue,
informed members the tax credit applies against a number of
types. It is the insurance premiums tax AS 21.89, the corporate
income tax AS 43.20, oil and gas severance tax AS 43.55, oil and
gas property tax AS 43.56, mining and license tax AS 43.65,
fisheries business tax AS 43.75 and the fish landing tax AS
43.77.
CHAIRMAN THERRIAULT explained that you get 50 percent of your
first $100,000.00 and 100 percent of your second $100,000.00 for
a total of $150,000.00. You may only get this once in any tax
year from any of the sources. Basically, this allows people to
direct their tax dollars to a specific purpose. This is allowed
in education as well and now the corporations will be able to
choose between the two options.
There were no further questions on the technical mechanisms of
the bill.
PAT CAROTHERS, Chairman of the Alaska Veterans Advisory Council,
said he was present to solicit support to move the bill forward.
There was no further testimony.
CHAIRMAN THERRIAULT noted there was no prepared CS and he had no
amendments.
SENATOR PHILLIPS made a motion to move SB 267 and fiscal notes
from committee with individual recommendations.
There being no objection, SB 267 move from committee.
SB 238-SECURITY OF FACILITIES AND SYSTEMS
CHAIRMAN THERRIAULT announced there was a proposed CS. In the
original bill there was discussion in Section 1 regarding
granting the Department of Transportation and Public Facilities
(DOT/PF) the power to levy fines at airport facilities. This
section was dropped. In Section 3 there was concern about the
language exempting orders from the Administrative Procedures Act
(APA) to boards and commissions that have regulation adoption
authority. Language granting the authority to exempt orders from
APA was dropped.
FRANK RICHARDS, maintenance engineer for the DOT/PF, apologized
for the confusion within the DOT/PF for not providing
clarification to some of the questions raised at the last hearing
of the bill.
He said he would like to address Sections 1 and 3 as they were
written in the original bill and perhaps provide clarification to
Section 1 so members could understand, from the department's
perspective, where they have had difficulties administering the
Federal Aviation Administration (FAA) mandated security programs.
The FAA requires 18 airports in Alaska to have security programs.
Two of those airports are in Anchorage and Fairbanks and the
remaining 16 make up the rural system. There is not an on site
FAA security coordinator at these rural airports so the airport
operator is responsible for administering the security programs.
When there are violations of the programs, the airport is held
responsible. Under the new revisions to part 107, which went into
effect in November 2001, the FAA now has the ability to cite the
airport and individual violators.
Although the DOT/PF is charged with administering the security
programs, they have no enforcement abilities. If they observe a
violation they have no ability to deter those violations in the
future.
Where law enforcement officers are available, they are able to
charge violators with a misdemeanor with a maximum $500.00
criminal violation. SB 238 would allow them to impose civil
administrative penalties of up to $1,100.00 per incident.
Currently, the FAA may assess a civil penalty of up to $1,100.00
against the DOT/PF for violating any of the security programs.
Although the FAA considers the DOT/PF to be the violator, nearly
all violations are the result of action by an employee of a
tenant or contractor. At the international airports where they
have law enforcement capabilities, they are able to restrict a
violator's access badge, but they are not anxious to do this
because it essentially takes away their livelihood.
They would like to identify violations and then attach
appropriate fines to those violations. The scale would be
graduated and the most serious violators would be levied the
$1,100.00 fine.
Rural airports receive security inspections about once a year so
for the majority of the time there is no federal oversight.
Nonetheless, the requirements are in place at all times. It is
their hope that the bill with Section 1 would move forward to
help them provide a better operation of the airport system.
MR. RICHARDS brought up the treatment of Section 3 in the
proposed CS.
CHAIRMAN THERRIAULT stated he spoke with Senator Cowdery and
advised him that the bill would probably move to the
Transportation Committee without Section 3. He recommended that
Mr. Richards argue that transportation related issue before that
committee.
He then disagreed with the DOT/PF's reluctance to remove an
individual's security badge for security violations. This is an
effective method of getting compliance and individuals that have
compliance difficulties might be better off in a different type
of job. He didn't see a problem using that available mechanism.
MR. RICHARDS replied it is a matter of progressive discipline. If
an employee is escorting someone without a badge and that person
leaves a secure door open, the person with the badge is
responsible for that act. Taking that individual's badge away
limits their access to a secure area and therefore limits them
from doing their job. They felt they that if they were able to
levy a civil penalty, that would limit their unacceptable
behavior without putting them out of a job. Across the country,
it is those minor violations that are the most prevalent security
breaches.
CHAIRMAN THERRIAULT asked whether the state couldn't pass a fine
down to the contractor if the violator was an employee of that
contractor.
MR. RICHARDS agreed they could do so. Under the new part 107 for
airport security, the FAA is able to cite the airport as well as
the individual. The individual includes not only the person but
the employer.
CHAIRMAN THERRIAULT asked if other committee members had
questions regarding the section the proposed CS drops from the
bill.
SENATOR STEVENS said he was still unclear why he might want to
return to the original version of the bill. Everything is already
in place and Section 1 simply gives authority to the state to
levy a fine on FAA requirements. This is why he requested that
Section 1 be removed originally. It gives authority to levy a
fine based on an FAA requirement not a state requirement. The
contract the DOT/PF has with the tenant says that if they are in
violation of an FAA code they will pay. He's in full agreement
with that, but doesn't understand why the DOT/PF still wants the
authority to levy a fine when there is already a criminal fine, a
civil fine and the ability to remove a violator's badge.
MR. RICHARDS replied the major problems have come from the rural
airports that have no law enforcement officers in security
positions. Normally, there are just three or four individuals at
these small airports and they perform security functions, airport
rescue and fire fighting functions and equipment operation. They
are charged with administering security programs and at times it
is difficult for them when they have airport tenants with badges
who have been given security training but they are not complying.
CHAIRMAN THERRIAULT asked if they are state employees.
MR. RICHARDS told him state employees are administering the
security program, but it's the tenant or general public that may
violate the security plan.
SENATOR STEVENS said that's his point of concern. Each of the
regional operators would have the authority to levy a fine based
on an FAA regulation not a state regulation. There's already a
contract in place with the tenant that says if you violate you
will be subject to FAA sanctions. This gives the regional
operator the ability to levy a fine based on his interpretation
of a violation of a federal law and circumvents the contract that
is already in place. He recommended moving the CS as drafted.
CHAIRMAN THERRIAULT said he drafted the CS so there could be
forward movement on parts of the bill they could agree upon. Mr.
Richards would have the opportunity to argue his point before the
Senate Transportation Committee.
He asked Mr. Steiner from the Anchorage Attorney General's office
whether he had something to add to the discussion.
JOHN STEINER testified via teleconference that his priority tasks
are to represent the Anchorage and Fairbanks International
Airports but he also provides assistance and support to the rural
airports. In that capacity, he is very familiar with the security
situation. One of the reasons the civil penalties were requested
was because the FAA has traditionally penalized the State of
Alaska whenever there is a tenant or employee security violation
and these violations go down on the state's record.
SIDE B
Even though Senator Stevens was correct in stating that the FAA
can now penalize individuals, they believe the airport will also
be penalized for any contractor violation because those
individuals are carrying out the airport security plan. One of
the difficulties with the current situation is that the penalties
are either very onerous or very cumbersome. There is no question
the airport needs a mechanism to ensure that violations such as
security doors being left ajar don't happen; but for someone to
lose their job or be thrown in jail because of such an infraction
is too harsh. Graduated penalties would be more effective and
easier to use.
There were no questions for the witness.
SENATOR STEVENS made a motion to adopt 22-GS2091\C Bannister
2/12/02 as the working document. There was no objection.
CHAIRMAN THERRIAULT stated he had no prepared amendments to
either the original bill or the CS and there was a zero fiscal
note from the DOT/PF. He noted the title of the bill changed but
it is a little broader making it possible for Section 1 to be
reinserted in a subsequent hearing in another committee.
He asked for the will of the committee.
SENATOR STEVENS made a motion to move CSSB 238(STA) and the
fiscal note from committee with individual recommendations. There
being no objection, the bill moved out of committee.
SB 236-HOMELAND SECURITY APPROPRIATIONS
CHAIRMAN THERRIAULT announced they have received a series of
spreadsheets from legislative finance that separate capital
budget items from the 2002 and 2003 budget items. They hadn't had
the opportunity to thoroughly analyze them so the bill would not
be heard that day.
SB 240-TERRORISTIC THREATENING/PIPELINE DAMAGE
CHAIRMAN THERRIAULT announced there is a proposed CS for SB 240.
JOE BALASH, Staff to Senate State Affairs Committee, explained
the work draft does two things. First, it adopts the amendments
that the Department of Law recommended in previous hearings.
Those have to do with making damaging pipeline or facilities part
of the conspiracy statutes. It also incorporated changes to
murder in the first degree.
The major change occurs on page 4 where the criminal mischief
statutes are discussed. Originally, a separate crime of
intentionally damaging a pipeline or an oil or gas facility was
created as a class A felony. Under current law, that particular
crime is criminal mischief in the first degree and classified as
a class B felony. Rather than create a separate law, they made
criminal mischief in the first degree a class A felony,
accomplishing the same thing. All the other crimes within
criminal mischief in the first degree meet the requirements of a
class A felony, which made it easier to move that crime up.
Problems arose in criminal mischief in the second degree because
part of criminal mischief in the second degree is tampering with
a pipeline or oil and gas facility. That is something the
department wanted to move up in classification to a class B
felony. The only way to do that was to pull everything else out
of second degree and put them into third degree. This eventually
resulted in a cascading effect when third degree became fourth
degree and fourth degree became fifth degree. All of the
classifications of felonies and misdemeanors also moved down the
scale. All the changes in references in various statutes are
reflected in the CS.
CHAIRMAN THERRIAULT reminded members that the Attorney General's
office had suggested that the original bill structure would avoid
the cascading and renumbering effect. However, the result of that
troubled the legislative legal counsel because the existing
criminal mischief section would have this new law tacked on
instead of incorporated into the list. The CS follows the
suggestions of the legislative legal drafters to keep the
statutory structure as clean as possible.
He asked if members had questions for Mr. Balash on the structure
of the CS.
SENATOR STEVENS asked if there are already guidelines for the
fourth and fifth degrees.
MR. BALASH said that would be a more appropriate question for
Mrs. Carpeneti.
ANNIE CARPENETI from the Department of Law said the crimes are
simply being reclassified. She added it does not change the
sentencing provisions for the cascading offenses.
SENATOR STEVENS said he can certainly understand bringing in gas
pipeline or oil pipeline supporting facility but questioned
including an airline or commercial vehicle. He asked if this
means that anything that is done to an aircraft that exceeds
$500.00 is automatically a second-degree criminal mischief
violation.
He said he was referring to page 5, Section 9 and wondered if the
reference to an airplane includes both private and commercial.
MRS. CARPENETI said this is existing law and does include all
aircraft. Currently this is a class C felony and she thought the
original drafters of the criminal code intended for this to be
broad based because of the potential harm to people and property
when anyone tampers with aircraft.
SENATOR STEVENS thought there should be varying degrees of
punishment based on the size of the aircraft.
CHAIRMAN THERRIAULT offered the thought that whether it is a
Cessna or a larger aircraft there is the potential for the loss
of life.
SENATOR STEVENS responded one is a catastrophic loss of life and
one could be criminal mischief. In his opinion, there is a
difference between the intent to damage an aircraft that is worth
$50,000.00 to $100,000.00 versus a 60 passenger or larger
airline.
MRS. CARPENETI said the scheme of criminal mischief does allow
for that. There is charging discretion in the prosecutor's office
to account for the differences in harm to people and property.
CHAIRMAN THERRIAULT asked if she agrees that the CS contains the
substance of what the Department of Law suggested.
MRS. CARPENETI thanked the Chairman and said they are in support
of the substantive changes and understand the rationale behind
setting it up this way.
There was no further testimony.
CHAIRMAN THERRIAULT asked for a motion.
SENATOR DAVIS made a motion to adopt the 22-GS2097\F Luckhaupt
2/12/02 version as the working document.
There was no objection.
SENATOR THERRIAULT noted there were no proposed amendments and
the fiscal notes from the Department of Law and the Public
Defender Agency were zero.
He asked for the will of the committee.
SENATOR DAVIS made a motion to move CSSB 240(STA) and two fiscal
notes from committee with individual recommendations.
There being no objection, CSSB 240(STA) moved from committee.
There being no further business to come before the committee,
Chairman Therriault adjourned the meeting at 4:45 p.m.
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